Although youngsters entering college for the first time may seem a world apart from the average elderly citizen, these two groups have a very important common trait; the need for adequate housing. For many years young people have rented the absolute cheapest place possible to save on expenses that were devoted to college expenses. At the same time, many older people find themselves in need of downsizing their home or even selling their beloved property in order to devote more funds to basic living costs and medical bills at a time when their income has been drastically reduced. Thankfully, the Family Opportunity mortgage can assist both of these groups.
Basic Purpose of a Family Opportunity Mortgage
The idea behind the Family Opportunity mortgage is to give qualified people a chance to buy a home for either their children that are in college or their elderly relatives without the requirement to live in the home themselves. Since many families are often scattered many miles away this provides an alternative to renting and gives the purchaser of the property a valuable asset that can be later sold when their needs change.
Qualifications for College Students
Here are the basic criteria for people who wish to buy a home for their college students.
- The student will need to provide adequate documentation showing their enrollment in college
- The student must live in the home as their primary residence for at least one year.
- The home will need to be within a reasonable distance to the college or university.
- The home must be far enough away from the parent’s current home to be considered a second home
- The parents are not allowed to own any other vacation homes or second properties within the same area.
- The parent(s) are the only ones considered for the mortgage. The child will not be part of the loan.
Qualifications for Elderly Parents
These are the basic requirements for adults wishing to purchase a home for their elderly parents.
- The elderly parents must either be in a situation where their income is not sufficient to be approved for a mortgage or they do not have the ability to work.
- The elderly parents must live in the home as their main residence.
- Unlike the qualifications for college students there is no requirement of distance between the home of the elderly parent(s) and the home of the adult child.
- The elderly parents are allowed to be a co-borrower on the mortgage, but it is not necessary. The adult child will be the primary focus of the mortgage application.
- The adult child may own a primary residence in addition to applying for the home of their elderly parent.
For parents who have the financial resources to purchase a home for their college bound child or their senior aged parents this is a wonderful Freddie Mac program that allows people to invest in a real estate asset instead of pouring money away in a rental agreement.